EXCLUSIVE: Regions have to follow mining standards set by central government
Wednesday, November 1 2000 - 07:30 AM WIB
The regional administrations will have to follow the standards set by the central government and the House of Representatives in managing their mining resources, including issuing licenses to investors, after they take over mining rights from the central government next year, according the ministry of energy and mineral resources' draft decree.
The draft ministerial decree, whose copy was made available to Petromindo. Com on Wednesday, states that the central government would make a standard contract for mining operations in consultation with the House.
The regional administrations had to follow the standard contract in issuing licenses to mining investors.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro is expected to issue the decree Nov. 6.
The decree aims at providing guidelines for regional administrations in managing their mining resources after they take over the mining rights from the central government under the 1999 Autonomy Law that will come into force in Jan. 1, 2001. Under the Autonomy Law, the mining rights will be held by the regency or mayoralty administrations.
Analysts say the ruling apparently seek to appease the worries of investors the mining industry will plunge into confusion after the regional administrations take over the mining rights from the central government.
They fear that the regional administrations will compose their own contracts, make their own regulations for mining industry in order to gain the maximum revenue from the development of their natural resources.
The decree however tries to prevent the regional administrations from taking carefree actions that might cause damage to the industry, analysts say.
The decree says after taking over the mining rights on Jan. 1, 2000, regencies and mayoralties have to meet some requirements to exercise the rights.
The regencies and mayoralties first have to officially notify the ministry of energy and mineral resources and the so-called "regional autonomy advisory body" that they are ready and capable to exercise the mining rights.
The ministry and the regional autonomy body will then evaluate whether the regencies and mayoralties are really ready and capable to exercise the rights.
In order to gain approval from the ministry and the body, the regencies and the mayoralties have to show that they have bylaws on the development of mineral resources which are not in conflict with the regulations and standards set by the central government.
The regencies and mayoralties have also to show that they already have capable organizations to regulate the mining industry, process licenses, supervise exploration, production activities, manage database and evaluate reports.
The decree also says the ministry will not process applications for new mining contracts from Nov. 6 as it is going to transfer the processing job to the regions on Jan. 1, 2000.
It however notes that the ministry will continue managing foreign mining investment, which have secured contracts prior to the implementation of the Autonomy Law. (Alex/ Godang)